I think you might have confused what I was recommending. I'm recommending that the monitoring should be a Health Canada function. The crown corporation would be charged with manufacturing some of these products.

It wouldn't guarantee continuous supply. If you have a shortage of active ingredients—and a lot of those ingredients come from China or India, where manufacturing quality may be a problem—supply would not be guaranteed, but it would mean that in the event of shortages, we might be able to control pricing on these products. The crown corporation wouldn't be in the same situation as a privately owned generic company, which makes decisions about which products to continue or discontinue based on economics.

Drugs have been described as products that are not necessarily the same as other consumer products, when it comes to ensuring patient safety and therapies.

Mr. Poston, when you spoke about the need for Health Canada to play a broader and more proactive role in these types of situations, you said you were in favour of a voluntary system for manufacturers to report conditions that pose a risk.

And yet, when manufacturers do not necessarily follow the rules and fail to report risks regarding their drugs, what do you think Health Canada should do?

One of the interesting issues we've had with drug shortages is this question of....

I think one of the challenges we all have is that the drug regulatory process and the exchange of information that goes on between the drug regulator and the manufacturer, whether it's FDA or Health Canada, is pretty much a black box. We really don't know what goes on in there.

One of the important issues around regulation of manufacture.... We've had two instances in the last two years in Canada involving manufacturing plants. One was in 2010, with the plant in Etobicoke, a generic manufacturer. To all intents and purposes Health Canada was comfortable with the manufacturing facility, as far as we know, but then we had the situation in which action was taken by FDA that resulted in shortages from both those plants.

The basis of our recommendation is that one of the things we'd like to see is much greater collaboration between Health Canada and FDA with respect to regulation and manufacturing.

At our last meeting, we heard from the Quebec society of pharmacists, the Ordre des pharmaciens du Québec. That organization told us that while the federal government does have the Special Access Programme, it has not been adapted to address the drug shortage.

Do you think Health Canada should adapt the federal government's Special Access Programme to drug shortages, which are not only more frequent, but also more severe, to maintain a stockpile of critical drugs for patients?

It would be very challenging for Health Canada to introduce that type of policy, which is very locally based, to determine the critical drugs that we require in our specific hospital and our specific situation. For many of the decisions it is very important to have the patient-physician interaction. You really need to understand the needs of the patients and of the individual institutions. To have that situated at the federal government would, I think, be a bit of a challenge.

We've come to the end of that round. I want to thank our guests for being here.

Generally speaking, I know everyone rushes to the back. I'm going to suspend for only one minute so that Health Canada can move into position.

If there are any conversations, please hold them outside the room so that we can continue our committee work. I would ask the committee members to stay in their places so that we can get started right away.

Thank you. We'll suspend for one minute, and then I want to welcome our guests.

Madam Chair, I am pleased to have this opportunity to update the committee on the progress that Health Canada has made in support of the ongoing national effort to manage the shortage of medically necessary drugs supplied by Sandoz Canada. I would like to begin with a brief explanation of Health Canada's role in the country's drug approval and supply system.

Health Canada's primary role is to ensure that drugs bought or sold in Canada, whether in shortage or not, are safe, effective, and of high quality.

Once Health Canada has authorized a drug, producers and purchasers are free to enter into commercial contracts for supply. Drug companies manufacture and supply needed medications; provinces and territories make the arrangements with suppliers to purchase them. Drug makers are the first to know when the production may be interrupted; provincial and territorial health authorities are the first to know the impact of a shortage on patients, and can plan accordingly if given enough time.

The term of supply contracts, the cost, the amount of production, the rate of usage, the number of suppliers required, distribution, and penalties for non-delivery are all worked out between the purchasers and the suppliers. Health Canada has no role or involvement in this regard.

When a shortage arises, Health Canada, consistent with its mandate and authority, works closely with purchasers and suppliers to ensure that any new supplies of needed drugs are safe, effective, and of high quality. Madam Chair, I'm pleased to report to the committee that we have made significant progress in this regard.

Health Canada is currently reviewing 35 drug submissions on an expedited basis. Of those 35, Health Canada has already approved 11. As of this morning, we have also approved 59 requests for emergency access to needed drugs through our special access program.

In order to ensure that the support we provide is of greatest use, Health Canada prioritizes drugs for review based on the needs identified by the provinces and territories. I want to assure the members of the committee that at no stage of our expedited review process has safety ever been compromised, nor will it be.

I must also caution members that an authorization does not mean immediate arrival of additional drugs in hospital pharmacies. Manufacturing capacity has to be ramped up, and safety and quality have to be confirmed at every step of the manufacturing process.

Hereto, Health Canada has provided prompt support. We have approved 10 sites additional to Sandoz's list of approved sites. These sites perform manufacturing and product testing for the Canadian market. Purchases and suppliers, including Sandoz Canada, are expediting the manufacturing and supply process.

Finally, purchasers must decide whether or not to buy, once a new supply has been authorized.

We have to be clear that it is unlikely that these new drugs will be in the Canadian supply system for some weeks yet. In the meantime, the focus of health professionals and of Sandoz will be on minimizing the impact of the shortage on patients. In this regard, it is important to note that the Public Health Agency of Canada has made available to the provinces and territories needed drugs from the limited stocks available in the national emergency stockpile system. To date, no requests have been received.

Madam Chair, in addition to expediting drug approvals, Health Canada is focused on encouraging better information-sharing between suppliers and purchasers. Through the various networks supported by the health portfolio, we are bringing purchasers and Sandoz together on a weekly basis to exchange the latest supply information and to foster national coordination in the shortage response.

As the committee will know, the Minister of Health has long made it a top priority to encourage companies to fill information gaps around actual and potential drug shortages. Doctors and pharmacists need enough advance notice of a shortage for treatment plans for patients to be smoothly adjusted if needed.

Health Canada's collaborative work with industry has begun to pay off. It has resulted in a commitment from Canada's research-based pharmaceutical companies and the Canadian Generic Pharmaceutical Association, of which Sandoz is a member, to communicate potential and actual drug shortage information to Canadians via two existing public websites.

Industry, together with the health professional associations, has also committed to the development of a national one-stop drug shortage monitoring and reporting system in 2012.

The impact of the Sandoz shortage has made it clear that getting this one-stop information site up and running is more important than ever. The minister was pleased to note that Rx&D and CGPA have recently come forward with a commitment to support funding for one national site.

The committee also heard a few minutes ago the desire of the Canadian Agency for Drugs and Technologies in Health to play a helpful role in drug shortages going forward.

Madam Chair, Health Canada supports making public reporting of potential or actual drug shortages a requirement. The minister was pleased to note that in the response to her letter seeking increased transparency around shortages, industry associations have clearly committed their members to public reporting of anticipated and actual shortages. In addition, reporting obligations can be made formally binding if purchasers of drugs on behalf of provincial and territorial clients embed this reporting obligation in their supply contracts, as well as a requirement that suppliers have contingency plans in place in the event that they are unable to fill orders.

Indeed, one of the main bulk purchasers, HealthPRO, told the committee this week that starting this fall it will be awarding multi-supplier contracts for hospital-specific items, and that when there is only one supplier, they will be actively pursuing other suppliers.

I would just like to reaffirm for the committee that Health Canada will continue to play its part on this important issue by approving alternate sources of supply during the Sandoz shortage, and we are working with our partners to find longer-term solutions that help cushion patients against possible future shortages.

That concludes my remarks, Madam chair.

I would like to thank the committee for inviting me to appear today to discuss a topic of paramount importance. I would now be happy to answer your questions.

As you probably heard, Dr. Lexchin recommended that Health Canada create an expert committee to identify off-patent drugs that are supplied by only one or two companies and that are considered “critical” to medical care. I won't list all of his recommendations, which also call for Health Canada to identify alternative sources of drugs deemed critical to the health of Canadians.

I would like you to comment on his suggestion of convening an expert committee that would be tasked with identifying alternative drug sources.

First and foremost, to confirm for the member, I was not present during the previous panel, so I cannot comment directly on all of the interventions that they were able to make.

However, in response to the member's question, we do feel that it would be quite a challenge for Health Canada to play that particular role, as we do not know what is going on between the purchasers, the large bulk-purchasing agents, and the various suppliers. We would need to become party to all of those contractual arrangements. We do, however, think it's very important, and we encourage all jurisdictions to diversify their supply as we move forward.

Health Canada does take a look at all submissions provided to us from the drug companies, and we will provide alternate authorizations. In fact, in many instances we authorize numerous companies to provide the drugs available to the market. How we end up with a sole supplier of a particular drug....

In the current situation with Sandoz, of the eight drugs that the provinces identified as their highest priority, Health Canada had previously authorized alternate suppliers for all of those drugs, so it becomes a practice of purchasing that leads us to the sole-source supplier arrangements. We think that the best place for that intervention is between the suppliers and the purchasers. We've already seen that they're beginning to react and respond, based on their sole-source purchasing habits, and making the necessary adjustments.

At no time do we believe that Health Canada, through any of our policies or actions, contributed to a drug shortage. Through a matter of policy, there are always drugs in our queue waiting for approval. When we understand that a drug is medically necessary and is of priority to the health system, we can expedite the review process. That's something we do and have continued to do, whether drugs are in shortage or not. We give priority to new, innovative therapies, rather than approving a second or third me-too drug, if you will, and we continue to do that.

We have, through investments in the program, significantly improved our performance. We are meeting all of our performance targets, with the exception of generic drugs. In all instances, as we approve drugs, we do so with the full intent of making sure that they are brought to the market as quickly and efficiently as possible; that is, we provide authorizations that the drugs are safe and of high quality. It is really up to the market to determine, once the authorizations are provided, if they will choose to purchase from that source that we have authorized.

We are, in fact, aware of a number of instances in which, after we have authorized a product, the market has chosen not to purchase from that, or potentially the authorization holder has decided not to enter the Canadian market, despite having gone through our approval process and paying us substantial fees to achieve our approval.

It is difficult for me to say exactly why these drug shortages happen, since we do authorize numerous sources of supply.

I'm going to follow up on my question that I asked you earlier. You said that you would prefer to let the suppliers and the providers arrange things among themselves and provide a solution. Health Canada does monitor the drug shortages that will come or that could happen down the road, right?

Mr. Chair, we do not have a legislative or regulatory responsibility with respect to drug shortages. We continue to play a role when asked by provinces and jurisdictions.

If I may—I know your time is limited—we have the two public websites up and running right now. There are about 200 drugs that the pharmaceutical companies have posted on those websites that the health system is dealing with and that are in limited supply, so they're making alternate purchasing arrangements, they're changing their therapeutic approaches, and they have not asked for federal intervention. They're dealing with those at a very localized level—

I understand that our Minister of Health had been working aggressively behind the scenes to manage the transparency of drug shortages well before the situation at Sandoz arrived. I understand she's been in close touch with industry and has written several letters.

Could you enlighten this committee, in a chronological order, on what our Minister of Health has been doing on that front?

The Minister of Health did become quite concerned over a year ago about the global problem of the increasing number of shortages that were being experienced worldwide, not just in Canada but as a global problem.

She wrote to the various industry associations, including Rx&D in terms of the brand names, CGPA for the generics, the biotech industry, the Canadian Medical Association, the Pharmacists Association, the distributors, the wholesalers, and others. She asked them to work together, first to improve transparency, so that if there were drug shortages, there would be a way to notify the health systems so that they could respond, and second to take a look at what they could do in reducing the number of drug shortages that were occurring.

In response to her recommendation, a working group was formed. They began as a collective to address this issue. They wrote back to the minister with a plan that had three phases. The first phase, which is already up and operational, involves the existing websites, the ones that exist today, where industry is now posting drug shortage information and making that available to any and all Canadians in the health jurisdictions. There are two existing websites.

Our response was while that was a positive first step, it was not sufficient; there needed to be a one-stop site where all health system practitioners, professionals, provinces, and Canadians in general could go to get information on drug shortages. That's the second phase, which is being accelerated right now. The two main industry associations have put money on the table to build this second phase.

That will be a positive step. That new site should have increased functionality, and not just with regard to what drugs are in shortage. It will address the previous member's question with regard to how to deal with a shortage of a particular drug, what alternatives can be used to treat a patient, and other information that might help health system practitioners deal with shortages.

The minister also recently wrote to the associations to express her concern that their members weren't using the sites for reporting and were actually posting drug shortages on their own websites. The minister has since received written commitment from all the members of the industry associations that they will now begin using those websites and, in fact, we have seen a spike in the amount of reporting to the public websites accordingly.